Chicago hospital merger push driven by economics

This article was in a recent edition of the Chicago Tribune newspaper (http://www.chicagotribune.com/business/chi-thu_advocate1.17jan17,0,7364306.story).

The article says that a flurry of Chicago-area hospitals are discussing plans to merge or seek buyouts. The trend reflects a push by smaller hospitals to combine with larger providers to gain market share and clout with insurance companies who pay for the hospital’s services, help fund expansions or deal with the rising number of uninsured patients. It’s also easier to merge instead of going through regulatory and financial hurdles when building, analysts say.

My question to you is this – does this trend portend to physician practices also? Aren’t physician practices feeling the same pain and are seeking the same benefits of a merger. YOU BET THEY ARE! But for some reason physicians just can’t seem to get over the hurdle and decide a merger is in their best long term interests. I know they don’t want to lose their independence and such, but I still don’t see the economic viability of the small to medium practices when I look in to the future.

So why aren’t we seeing more physician mergers? I know the pain is there and I’m about to see it confirmation of it when I prepare the 2007 individual income tax returns of these physicians. Guess what I’m going to see – a continued decline in physician income.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.